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A Study of the

Costs of Legal Services in


Personal Injury Litigation
in Ontario
FINAL REPORT
Allan C. Hutchinson

TABLE OF CONTENTS

Introduction ................................................................................................................................................. 3
PART A -- THE REGIME OF CFAs ........................................................................................................ 3
PART B THE REALITY OF CFAs: DATA AND STUDY ................................................................ 11
PART C THE FAILINGS OF THE PRESENT REGIME OF CFAs ............................................... 18
PART D SOME PROPOSALS FOR REFORM OF CFAs ................................................................ 21
APPENDIX ONE ....................................................................................................................................... 23
APPENDIX TWO ...................................................................................................................................... 30
APPENDIX THREE ................................................................................................................................. 34
APPENDIX FOUR .................................................................................................................................... 35
APPENDIX FIVE ...................................................................................................................................... 43
APPENDIX SIX ......................................................................................................................................... 48
APPENDIX SEVEN ................................................................................................................................ 113
APPENDIX EIGHT ................................................................................................................................ 191
APPENDIX NINE ................................................................................................................................... 226

Introduction
Contingency Fee Agreements (CFAs) are now a fixed feature of the Ontario litigation landscape.
However, little research or study has been done on exactly how they operate in practice, whether they
advance the objectives that they were intended to achieve, and whether litigants are best served by the
current arrangements. In this study, I intend to make a preliminary start to that research, set out some
tentative criticisms of the CFA system as it currently operates, and, where appropriate, suggest
preliminary proposals for change.
It should be said at the outset that my efforts to obtain real and serious data and information about the
reliance on and kind of CFAs utilized by Ontario lawyers have been frustrated at every turn. Although
often divided and divisive in interests, the Plaintiffs Bar seems to be almost uniquely united in striving to
resist any efforts to render the fee-charging process more transparent and knowable. Accordingly, this
Report has been written not only without any assistance from the Plaintiffs Bar, but with its concerted
opposition. While there is an understandable concern among the Plaintiffs Bar about any inquiry that is
driven and funded by the Insurance Bureau of Canada (IBC), the extent of the concern has reached almost
paranoid proportions in attitude and response. However, I have tried to ensure that this fact has not
influenced my analysis and recommendations.
In what follows, I will first outline the formal regime within which contingency fees are allowed and
regulated in Ontario. The focus of this Part is to get a general and comparative sense of the legal and
policy framework for CFAs. The core of the Report attempts to go behind the received picture of CFAs
and get to a more realistic sense of how they actually work in practice. Next, I draw some tentative
conclusions and critical observations from the available data and information. Finally, I will put forward
some proposals to address the more apparent failings of the present system in order to enhance its
efficiency, fairness, and transparency.
Throughout the Report, the emphasis will be on understanding and improving the existing system from
the point of view of the litigant-as-consumer. The challenge is to make justice more available, but at a
reasonable cost so that the interests of both litigants and lawyers are fairly represented, balanced and
advanced.

PART A -- THE REGIME OF CFAs


1. The Costs of Litigation
The expense incurred in staffing and maintaining the courts is met largely by the state, with the litigant
paying only a minimal sum to utilize these facilities. The major financial burden incurred by the parties is
the cost of legal representation. A lesser expense is the payment of incidental expenses, so-called
disbursements, that are incurred throughout the litigation. In allocating this burden, the legal system has
two alternative solutions. It can permit costs to lie where they fall and leave litigants to pay their own
costs, regardless of the outcome of the litigation, or it can order that costs should follow the event and
require the unsuccessful litigant to pay the costs of the successful litigant.
Whereas the Americans have adopted the former as a general rule, the Anglo-Canadian system has opted
for a general rule of indemnity. This means that successful litigants may recover any costs that have been

reasonably incurred in litigating the dispute, provided that their conduct is not of a kind that should result
in no entitlement. It is generally acknowledged that a successful party will receive about 50-60% of the
actual costs incurred.
Although contingency fee arrangements are a long-standing feature of the American litigation system,
they have only been allowed in Canada in more recent decades. This reflects an historical antipathy in the
Anglo-Canadian system to allowing CFAs because they are generally thought to encourage lawsuits. The
basic hostility to contingency fees as a form of champertous1 agreement is captured by Spiegel J.s
statements in Bergel & Edson v. Wolf:
Rules against maintenance and champerty were introduced over 700 years ago in
response to abusive interference in the legal system by powerful royal officials and
nobles. Although the particular abuses against which the prohibitions were directed had
been cured by the time of the Tudors, the rules continued to survive. In modern decisions
concerning maintenance, courts do not refer to the mediaeval origins of the doctrine, but
justify its continued existence on the basis of public policy considerations. The antipathy
of the courts to champertous agreements similarly is supported by policy concerns. In
these expressions of policy are the roots of the arguments justifying the present ban on
contingent fees.2
Nevertheless, a proportionate relation between fees and the amount of damages awarded has always
played a role in fee arrangements, even if a limited and understated one. For instance, in Cohen v. Kealey
& Blaney in 2000, the Ontario Court of Appeal affirmed a list of considerations to be taken into account
by an assessment officer when conducting a fee assessment:3
the time expended by the solicitor;
the legal complexity of the matters to be dealt with;
the degree of responsibility assumed by the solicitor;
the monetary value of the matters in issue;
the importance of the matter to the client;
the degree of skill and competence demonstrated by the solicitor;
the results achieved;
the ability of the client to pay; and
the clients expectation as to the amount of the fee.
2. Rationale for Contingency Fee Agreements
The basic rationale for allowing any kind of CFA is that it allows people who cannot afford legal services
to bring claims that they would otherwise have to abandon. This general policy objective seems
unimpeachable in its logic and effect. The litigant will be able to proceed in the confidence that they will
not be left with an enormous economic burden if their claim fails. Of course, this state of affairs is

Definition: referring to sharing in the proceeds of a lawsuit by an outside party who has funded or assisted in
funding the litigation.
2
Bergel & Edson v. Wolf (2000), 50 O.R. 3rd 777 at para. 22. For a general history from an Ontario standpoint,
see Andrew Murray, Contingency Fees What Is Old Is New Again (March 4, 2005).
3
Cohen v. Kealey & Blaney (1985), 26 C.P.C. (2d) 211 at 215.

premised on the high cost of legal services lawyers fees are often perceived to be prohibitive by many
potential litigants, especially where they are already injured or indebted. That said, it also must be
recognized that lawyers should be entitled to a reasonable rate of compensation for services rendered.
Consequently, the challenge is to ensure that the benefits of CFAs to litigants are not obtained at an
exorbitant cost and that a balance is struck and maintained between the advantages of more claims being
litigated and the costs of doing so. In other words, any legitimate regime of CFAs must work to ensure
that both sides of the equation, litigants and lawyers, are balanced. Access to justice should be obtainable
at a reasonable cost and lawyers should be entitled to fair compensation for their services, but they should
not be allowed to obtain undue financial benefit from the plight of impecunious or vulnerable litigants. In
short, although promoted as a device to benefit litigants, CFAs must not be permitted to operate to
prioritize the financial interests of lawyers over litigants.
When a lawyer is paid a percentage of the settlement amount (with the settlement amount often equaling
the insurance limit), a lawyers financial incentives will vary considerably. Under the traditional billing
regime, a lawyer knows that he or she will be paid in accordance with the work that they have done.
While this system presents some risk that the client will not pay, most lawyers finesse this possibility by
requiring retainers up-front. Indeed, under the traditional arrangements, there is a genuine concern that
lawyers will have an incentive to do more work than a file may require.
Under a CFA, a lawyer will face a very different set of incentives. This is because, irrespective of the
amount of hours the contingency fee lawyer puts in, the lawyer will be paid a percentage of the settlement
or judgment amount. While this may incentivize them to ensure that their client wins a substantial
amount, they will also be disincentivized from putting in too much time since their compensation
remains fixed. Indeed, their economically optimal approach is to ensure that their efforts will lead to an
improved resolution of the case, but only up to a certain point. In other words, rational lawyers under
CFAs will strive to maximize their compensation by constantly assessing the cost-benefit of proceeding
further in the case. The cost can simply be seen as the amount of hours the lawyer puts into a case, while
the benefit is their percentage of the total settlement amount. A potential conflict of interest arises if the
lawyers incremental financial benefit from proceeding further will cause the lawyers effective hourly
rate or total compensation to fall.
According to Richard Posner, the doyen of law-and-economics scholars, the lawyer is effectively a cotenant of the property represented by the plaintiffs claim and therefore may lack an adequate incentive
to exploit the right (to litigate) because the value he creates will accrue in part to another person.4
Indeed, this may well incentivize lawyers to settle too early. Again, Posner offers a good example of this:
A problem with the contingent fee is that in any situation of joint ownership and a
contingent fee contract makes the lawyer in effect a co-tenant of the property represented
by the plaintiffs claim each owner may lack an adequate incentive to exploit the
right because the value he creates will accrue in part to another person. Suppose the
plaintiffs lawyer is offered a settlement of $100,000; if he goes to trial, there is a 90
percent chance that the plaintiff will win $150,000 but it will cost the lawyer $25,000
worth of his time to try the case; the parties are risk averse; and the contingent fee is 30
percent. If the plaintiff agrees to the settlement, he will net $70,000 and the lawyer

RICHARD POSNER, THE ECONMICS OF JUSTICE (*th ed. 19**).

$30,000. If the case goes to trial, the net expected gain to the plaintiff rises to $94,500 (.9
* ($150,000 - $45,000)) but the lawyers net expected gain falls to $15,500 ($45,000 * .9
- $25,000). So there is a conflict of interest between the parties that is due to the fact that
the lawyer does not obtain the whole benefit of a trial (the expected net benefit of trial is
($50,000 * .9) - $25,000, and is thus positive).5
In accordance with this perspective, it can be argued that lawyers should be entitled to receive a higher fee
than might otherwise be the case since they are seeking to spread the risk across a range of cases that have
no guarantee of success. So, in assessing the fairness of any fee received by a lawyer under a CFA, it is
important to acknowledge that, in some cases, a lawyer will invest considerable time and effort in a case
that does not produce any, or sufficient, funds to cover the time expended by the lawyer. However, as
Posner puts it, this risk is reduced because the lawyer specializing in contingent fee matters can pool many
claims and thereby minimize the variance of the returns. Accordingly, in order to assess the overall fairness
of lawyers compensation from CFAs, it would be necessary to obtain data on all files covered by CFAs to
ascertain the relative number of losing cases (i.e., the lawyer receives no fees) that are undertaken by
lawyers as well as the relative number of winning cases that are undertaken.
As regards the conflicting incentives for lawyers and clients under CFAs, the courts have acknowledged
that the difference between settling and going to trial can have some perverse effects on the lawyer-client
relationship. For instance, in the leading case of Hodge, it was estimated that, prior to trial,
disbursements amounted to $65,177.52. If the matter had proceeded through trial preparation or through
trial, that figure would have been several times higher due to the cost of expert witnesses. Moreover, the
lawyers fees would have been many times higher if the matter had proceeded to trail. But the cost to the
lawyer might be so high as to place the lawyers firm in serious jeopardy.
The challenge of mediating conflicting interests was well described by the court, especially when the
problem of double-dipping6 was involved:
[W]hen cases settle prior to trial, such clauses will frequently put the solicitor in a direct
conflict of interest with his own client. It is the solicitor who negotiates the settlement.
Defendants typically have no particular interest in how much of a settlement payment is
allocated to damages and how much is allocated to costs. What a defendant is interested
in is the bottom line - how much in total the defendant is prepared to pay to settle the
case. Often, the settlement amount is an all-in figure. If the plaintiff's lawyer is taking a
flat percentage, there is no issue. However, if the plaintiff's lawyer takes a percentage of
the damages in addition to all of the costs, it is in the interests of the lawyer to maximize
the amount allocated to costs and in the interests of the client to maximize the amount
allocated to damages. A simple example is illustrative. Suppose there is a contingency
agreement providing for a 20% fee to the lawyer and a settlement agreement is reached
for $100,000, all-in. The lawyer's fee would be $20,000. On the other hand, if the
lawyer's fee is 10% of the damages plus all of the costs, and the $100,000 settlement is
allocated as $70,000 for damages and $30,000 for costs, then the lawyer's fee is $37,000.
Since it is often the plaintiff's lawyer who negotiates the allocation of costs, or, even

5
6

Posner , id. at 614.


See later in this report for more on this topic.

worse, allocates the costs/damages himself, the conflict of interest is obvious.7


3. Contingency Fee Agreements
It was not until October 1st, 2004 that the Solicitors Act was amended to allow for contingency fee
arrangements (see Appendix One). Ontario was the last Canadian province to take this step. Section 28.1
provides that a solicitor may enter into a contingency fee agreement the lawyers fees may be
contingently calculated upon the disposition of the matter -- with a client as long as certain conditions are
met. In particular, the CFA cannot contain a provision that any amount that is to be paid for partial
indemnity costs or substantial indemnity costs can be subject to a contingency arrangement. The only
exception is where the lawyer and client jointly apply to a Judge of the Superior Court of Justice for the
inclusion of such costs in the CFA and the Judge is satisfied that there are exceptional circumstances (see
s.28.1 (8)).
Also, for personal injury claims, there are additional provisions under Ontario Regulation 195/04:
Contingency Fee Agreements (under the Solicitors Act) that must also be included in order for a CFA to
be valid (see Appendix Two):
1. If the client is a Plaintiff, a statement that the solicitor shall not recover more in fees than the
client recovers as damages or receives by way of settlement;
2. A statement in respect of disbursements and taxes, including the GST payable on the
solicitor's fees, that indicates,
whether the client is responsible for the payment of disbursements or taxes and, if the client is responsible
for the payment of disbursements, a general description of disbursements likely to be incurred, other than
relatively minor disbursements; and
that if the client is responsible for the payment of disbursements or taxes and the solicitor pays the
disbursements or taxes during the course of the matter, the solicitor is entitled to be reimbursed for those
payments, subject to Section 47 of the Legal Aid Services Act, 1998 (legal aid charge against recovery),
as a first charge on any funds received as a result of the judgment or settlement of the matter;
1. A statement that explains costs and the awarding of costs and that indicates,
a. that, unless otherwise ordered by a Judge, a client is entitled to receive any costs
contribution or award, on a partial indemnity scale or substantial indemnity scale, if
the client is the party entitled to costs; and
that a client is responsible for paying any costs contribution or award, on a partial indemnity scale or
substantial indemnity scale, if the client is the party liable to pay costs;
1. If the client is a Plaintiff, a statement that indicates that the client agrees and directs that all
funds claimed by the solicitor for legal fees, cost, taxes and disbursements shall be paid to the
solicitor in trust from any judgment or settlement money;
2. If the client is a party under disability, for the purposes of the Rules of Civil Procedure,
represented by a litigation guardian,

Hodge v. Neinstein (2015 ONSC 7345)

a. a statement that the Contingency Fee Agreement either must be reviewed by a Judge
before the Agreement is finalized or must be reviewed as part of both the motion or
application for approval of a settlement or a consent judgment under Rule 7.08 of the
Rules of Civil Procedure;
a statement that the amount of the legal fees, costs, taxes and disbursements are subject to the approval of
a Judge when the Judge reviews a settlement agreement or consent judgment under Rule 7.08 of the Rules
of Civil Procedure; and
a statement that any money payable to a person under disability under an Order or settlement shall be paid
into Court unless a Judge orders otherwise under Rule 7.09 of the Rules of Civil Procedure.
In November of 2002, Rule 2.08(3) was amended to incorporate a comment about CFAs. As well as
confirming the general validity of CFAs, there is editorial commentary (see Appendix Three):
In determining the appropriate percentage or other basis of the contingency fee, the
lawyer and the client should consider a number of factors, including the likelihood of
success, the nature and complexity of the claim, the expense and risk of pursuing it, the
amount of the expected recovery and who is to receive an award of costs. The lawyer
and client may agree that, in addition to the fee payable under the agreement, any amount
arising as a result of an award of costs or as a part of a settlement is to be paid to the
lawyer, which agreement under the Solicitors Act must receive judicial approval. In such
circumstances, a smaller percentage of the award than would otherwise be agreed upon
for the contingency fee, after considering all relevant factors, will generally be
appropriate. The test is whether the fee in all of the circumstances is fair and reasonable.
In general, therefore, CFAs are approved if they are found to be:
-- In compliance with the relevant provisions of the Solicitors Act and accompanying
Regulation;
-- Fair, assessed as of the date the arrangement was entered into; and
-- Reasonable, assessed as of the date of the hearing.
A contingency fee agreement can only be declared void, or be cancelled and disregarded, where the court
determines that it is either unfair or unreasonable. In other words, the emphasis of the analysis is on the
reasonableness and fairness of the agreement over and above compliance with the more discrete
requirements of CFAs set out in the CFA Regulation. However, compliance with these requirements may
also have some bearing on whether or not the CFA is determined to be fair and reasonable. For example,
if a CFA does not include the required statement that the client has a right to review, that shortfall may be
considered in weighing the CFAs fairness. Accordingly, if the agreement is not fair and reasonable, it
will be declared void and referred for an assessment to the courts assessment officers.
In Raphael Partners v Lam (2002), 61 O.R. (3d) 417, the Ontario Court of Appeal explained the two-step
process to be followed by a judge where enforcement of a CFA is sought pursuant to s. 24 of
the Solicitors Act:
Upon any such application, if it appears to the court that the agreement is in all respects
fair and reasonable between the parties, it may be enforced by the court by order in such
manner and subject to such conditions as to the costs of the application as the court thinks
fit, but, if the terms of the agreement are deemed by the court not to be fair and
8

reasonable, the agreement may be declared void, and the court may order it to be
cancelled and may direct the costs, fees, charges and disbursements incurred or
chargeable in respect of the matters included therein to be assessed in the ordinary
manner. R.S.O. 1990, c. S.15, s. 24. [emphasis added]
The lawyer bears the onus of satisfying the Court that the agreement was fair; it would be unjust to expect
the client to show that it was unfair in light of the overall imbalance in power and circumstances between
lawyer and client. As such, the fairness requirement is about the circumstances surrounding the making
of the agreement and whether clients fully understand and appreciate the nature of the agreement that they
executed. As noted, this is to be determined as of the date that the CFA was entered into.8 Notably, any
breach of the rules and regulations must be fundamental, not merely technical in nature and scope.9
In Hodge, the court made it plain that lawyers have a fiduciary duty to protect and promote the clients
interests above their own. It went on to say that:
Ms. Hodge's claim alleges that the solicitors in this instance entered into agreements that
enabled the solicitor to receive as fees both costs and a percentage of the damages.
Further, they did so without including in the agreement a provision that advises the client
that costs belong to the client unless a judge orders otherwise (as required under the
Regulations [sic]) and without getting a judge's approval for taking the costs (as required
under the Solicitors Act). The purpose of both provisions is the protection of clients ...
Further, the plaintiff alleges that the law firm entered into all-in settlements and then
simply allocated a portion of the proceeds to costs, thereby increasing the fees to be
received by the solicitors, to the detriment of the client. That would be a conflict of
interest and a further basis for a claim in contract and for breach of fiduciary duty. These
provisions [ss. 28.1(6), 28.1(8), 28.1(9)] of the Solicitors Act are intended for the
protection of the public and to improve access to justice. These are issues vitally
important to the integrity of our justice system. As such, they are to be given a broad and
liberal construction, consistent with that remedial purpose10
In the recent case of Zha, it was stated that:
It is unfortunate that experienced counsel are not following the guidelines that have been
repeatedly set out by the Court, as to what is required insofar as solicitor's fees are
concerned, in numerous cases dating back to at least 2007. See, for example, Marcoccia
(Litigation Guardian of) v. Gill, [2007] O.J. No. 12 (Ont. S.C.J.) and Lau (Litigation
Guardian of) v. Bloomfield [2007 CarswellOnt 5269 (Ont. S.C.J.)], 2007 CanLII 34443.
Furthermore, in an effort to provide assistance to counsel in their preparation of written
motion material for these motions Justice Wilkins of this Court, who deals with the vast
majority of these motions, issued the Rule 7.08 Best Practices Guidelines in late April
2013 ("the Guidelines").11

Edwards (Litigation guardian of) v. Camp Kennebec (Frontenac) 2016 ONSC 2501
Sguin v. Van Dyke (2013 ONSC 6576)
10
Hodge , supra note 7..NSC 7345)
11
Zhau (2015 ONSC 785)
9

Also, in Warnica, the court went further and contended that the lawyer has to demonstrate what it is that
she or he actually did in order to earn the 30% contingency fee claimed. Because that was not done, the
appropriate mechanism to permit that to happen, and also to ensure that [the lawyer] is paid a fair fee for
the service provided is to refer the matter for assessment 12 This approach has much to recommend it.
4. A Comparative Survey
The Ontario scheme bears many similarities to and differences from other Canadian provinces as well as
other common law jurisdictions (i.e., the United Kingdom and Australia) (see Appendices Four and Five).
I have included detailed charts that summarize these comparisons. I have not thought it pertinent to
canvass the arrangements in the United States because the basic difference in handling of costs (i.e., there
is no general rule in the U.S. that a substantial portion of the winners legal fees is paid by the loser; each
party is responsible for their own lawyers fees) makes any comparisons unreliable and distorted.
However, it is worthwhile to offer some general comments on the contrasts between the Ontario regime
and other jurisdictions in regard to contingency fee arrangements. While I do not pretend that these
comments are exhaustive or definitive, I do believe that they capture some important insights into factors
that make for a fair and effective CFA system.
1. While all provinces provide that there are lists of factors that must be contained in any CFA,
only New Brunswick provides and requires that a standard form be used;
2. Although there are exceptional circumstances in which court approval is required, almost all
provinces do not offer any approval or filing process. However, New Brunswick and
Northwest Territories/Nunavut require that a CFA must be filed with an officer of the court;
3. Apart from the filing process in 2 above, any complaints about a CFA are left to the
discretion of the client. Each province offers a court-based process for challenging a CFA;
4. As regards permissible percentages or fees charged under a CFA, only New Brunswick
(25%) and British Columbia (33 1/3%) impose a maximum figure. As for the other
provinces, Alberta and Saskatchewan have established very limited constraints on
contingency fees, while the remainder generally demand that fees charged are fair and
reasonable.
5. The Way Forward
The proof of any pudding is in the eating. It is only possible to assess the fairness and efficacy of a
particular scheme if data is available as to compliance with the letter and spirit of the statutory
framework. While there will inevitably be a gap between legislative intent and practice, the key issue is
the size of the gap are the statutory expectations followed more in the breach than in observance? And
how can the requirements and rules be amended so as to better protect the interests of litigants and
maintain the integrity of the litigation process from a public policy perspective?

12

Warnica v. Van Moorlehem (2012 ONSC 4241)

10

PART B THE REALITY OF CFAs: DATA AND STUDY


1. Initial Attempts at Data Collection
As stated in the introduction to this report, my efforts to conduct a rigorous and sophisticated empirical
study were foiled at every turn by the plaintiffs bar. There was not only no appetite for the study, but
also a defiant refusal to be part of it. Although I found this to be a disturbing and entirely over-heated
reaction, I have tried to remain open and balanced in my approach; I have sought to keep an open mind
about the both the benefits and drawbacks of CFAs and their operation in practice.
The study began with personal e-mails to a sampling of leading plaintiffs counsel in late October 2015.
The plan was to gauge counsels responses to a draft set of questions and determine if changes to the
questions were needed for the study itself. The initial e-mail sent read as follows:
I am writing to you as part of a research project that I am conducting on Lawyers Fees in
Personal Injury Actions.
It is my intention to obtain as much empirical data as possible on the fee arrangements
entered and charges made by both plaintiff and defendant lawyers. My focus is on the
situation of the injured parties and whether the present regime is best suited to advancing
their interests and needs. I have no axe to grind in this matter; it is simply a matter of
obtaining better and fuller information than is presently available.
In accordance with the ethics protocol for academic research, any information disclosed
will be held in the strictest confidence and treated with complete anonymity. I consider
this to be an essential commitment of professional integrity as a result of being both a
lawyer and a professor.
As such, I attach a short questionnaire for your perusal. I am sending this to all the
leading law firms in Ontario who engage in personal injury litigation. Ideally, I would
like to meet with you to discuss these matters.
I look forward to hearing from you and thank you in advance for your cooperation in this
important matter.
Regards, Hutch
Allan C. Hutchinson LL.D.
Distinguished Research Professor
Osgoode Hall Law School
York University
T 416 736 5048
ahutchinson@osgoode.yorku.ca

11

The questionnaire attached to the e-mail read as follows:


Personal Injury Litigation (Plaintiffs)
What kind of fee agreement do you generally enter into with prospective clients as
regards personal injury claims?
Do you use a standard retainer letter/contract? Please provide a copy if you do so.
Is it by way of hourly rates (which are?)?
Is it by way of contingency fee (which is?)?
Or is it a combination of both?
If it is by way of a contingency fee, is your percentage fixed? Or does your percentage
vary depending on a set of variables (e.g., length of time, amount of claim, etc.)?
Whether you use a contingency fee arrangement or not, do you provide the client with a
billing statement of hours spent on the file?
What do you do about disbursements? Are they chargeable whether the client wins or
loses? And, if they win, is it on top of the contingency fee?
If you are successful and recover costs as part of a settlement or judgment, are those costs
treated as part of the contingency percentage? Or is it on top of that percentage?
Do you loan money to clients or arrange for them to obtain loans? On what terms and
conditions? Please provide a copy if you do so.
Can you provide examples of cases that you have settled or won and what the final
figures were for damages obtained, fees charged, disbursements charged, and any other
connected charges?
The response to this initial e-mail was a firestorm of negative e-mails and phone calls. The views ranged
from reasonable suspicion through suggestions of political naivety on my part to outright allegations of
betrayal (as a fellow member of the Plaintiffs Bar). The fact that the work was being done through the
IBC was considered to be a major bone of contention. Despite efforts by me to allay concerns that I was a
prejudiced and bought researcher, the criticism and resistance did not abate. Accordingly, it soon
became clear that any attempt to proceed with my proposed approach would be met with stiff and
concerted opposition. After consulting with staff at IBC, it was agreed that I should proceed with the
research, but in a very scaled-down and modest manner. Consequently, I developed and implemented a
second-best approach to studying the operation of CFAs in practice.
2. Revised and Second-Best Approach
A plan was made to access all reported Ontario cases that mentioned the words contingency fee. The
period under study was from January 2010 to April 2016. This search generated an overall total of 471
cases. A number of these cases only mentioned contingency fee in passing and so were deleted from the
database. The bulk of cases arose by way of application by a disgruntled litigant who was objecting to the
fees charged by their lawyer. The sample included not only those cases involving personal injury matters,
but also encompassed other subject matter, such as class actions and guardians. The justification for

12

including the latter was that some of the commentary by judges and assessment officers had relevance to
contingency fees more generally. However, care has been taken to place the personal injury cases front
and centre in the ensuing analysis.
It should be noted at the outset that it is fully appreciated that this is a far from ideal way of proceeding
with the study. These cases represent a narrow view of contingency fees in that the cases only involve
files either where the plaintiff party identified some problem, real or imagined, with the ultimate charge
for legal fees or where the claimant, by law, required a litigation guardian and court approval of fee
arrangements was compulsory. Of course, there were many cases during the period examined in which
such circumstances did not apply and there was no court review. It seems reasonable to comment,
therefore, that looking at the overall practice of CFAs through the lens of such cases is like watching and
analyzing the world by looking through a keyhole; what you see might well not be representative of the
overall situation and may well be distortive of it. However, all that having been said, this way of
proceeding was the only one available in the circumstances. Although the conclusions drawn from the
data may well be limited and flawed, I maintain that they do offer some, albeit partial, insight into the
operation of the CFA system.
The recent Clatney case offers an example of the kind of unscrupulous, heavy-handed and frankly abusive
tendencies that can be engaged in. The case focuses on the plaintiff switching law firms in mid-litigation,
and casts a further shadow over the murky world of fee arrangements between personal injury lawyers
and injured parties. It notably demonstrates that there can be a considerable disconnect between work
done and fees charged. In her decision, Epstein JA for the Ontario Court of Appeal cited two excellent
sources concerning the overall role and stance of courts in regulating lawyers fees:
In Plazavest Financial Corp. v. National Bank of Canada (2000), 47 O.R. (3d) 647
C.A.), at para. 14, Doherty J.A. explained how the public interest informs the courts role
in supervising the rendering of legal services and payment of legal fees:
The rendering of legal services and the determination of appropriate compensation
for those services is not solely a private matter to be left entirely to the parties. There
is a public interest component relating to the performance of legal services and the
compensation paid for them. That public interest component requires that the court
maintain a supervisory role over disputes relating to the payment of lawyers fees. I
adopt the comments of Adams J. in Borden & Elliot v. Barclays Bank of Canada:
The Solicitors Act begins with s.1 reflecting the legal professions monopoly
status. This beneficial status or privilege of the profession is coupled with
corresponding obligations set out in the Act and which make clear that the
rendering of legal services is not simply a matter of contract. This is not to say a
contract to pay a specific amount for legal fees cannot prevail. It may. But even
that kind of agreement can be the subject of review for fairness: see s.18 of the
Solicitors Act.
In Price, at para. 19, Sharpe J.A. further elucidated the courts role:
Public confidence in the administration of justice requires the court to intervene
where necessary to protect the clients right to a fair procedure for the assessment
of a solicitors bill. As a general matter, if a client objects to a solicitors account,
the solicitor should facilitate the assessment process, rather than frustrating the
13

process.... In my view, the courts should interpret legislation and procedural rules
relating to the assessment of solicitors accounts in a similar spirit. As Orkin
argues, if the courts permit lawyers to avoid the scrutiny of their accounts for
fairness and reasonableness, the administration of justice will be brought into
disrepute. The court has an inherent jurisdiction to control the conduct of
solicitors and its own procedures. This inherent jurisdiction may be applied to
ensure that a clients request for an assessment is dealt with fairly and equitably
despite procedural gaps or irregularities.13
3. Analysis of Available Data
The available data does not lend itself to rigorous or quantitative analysis. It is merely suggestive, at best,
revealing certain tendencies and trends (see Appendices Six, Seven and Eight). However, on the whole, it
does not represent a very reassuring snapshot of the landscape of CFAs. Thus, it appears that not only are
some lawyers pushing on and back the limits of what is permitted in CFAs, but also some are engaged in
routine disregard of both the letter and spirit of the rules and regulations in regard to CFAs.
There are four particular issues that bear more attention judicial oversight, disbursements, doubledipping, and percentages charged by way of a contingency fee.
A. Judicial Oversight
Hodge gives a stark glimpse of what can happen when contingency fee agreements are made outside of
the courtroom and without judicial oversight. In this case, the lawyers created agreements that were
contrary to the law (e.g., the lawyer receiving compensation through both costs and a contingency fee,
without court approval, and thus contrary to s.28 (1)(8)). Furthermore, the proposed representative
plaintiff in Hodge was provided with only 27% of the total settlement amount apportioned for that
individual; there are 4-6,000 others who also had agreements with the law firm of Neinstein LLP.14
Hodge is the first case where the Superior Court interpreted the regulatory framework surrounding
contingency fees. For instance, the court clearly contrasted permissive and mandatory language, such as
may and shall, within the Solicitors Act. Thus, ss. 28.1(1) and (2) are permissive, stating that a
solicitor "may" enter into these agreements, while s. 28.1(4) is expressed in mandatory language: a
contingency fee agreement "shall be in writing. Likewise, there is a proscription in s. 28.1(3) against
contingency fee agreements in certain types of cases - criminal and family - and it also employs
mandatory language (the solicitor "shall not enter into a contingency fee agreement...).
While lawyers seem to understand that the law does not allow them to be compensated with contingency
fees in criminal law or family law cases, the data reveals many cases where lawyers have acted contrary
to the double-dipping section (i.e., lawyers cannot receive both a contingency fee and any costs awarded
or agreed to) of the legislation. This is despite s.28.1 (8) [using] the same kind of proscriptive language
as the subsection prohibiting contingency fees in criminal and family law cases [with that section being
s.28.1(3)].15

13

Clatney v. Quinn Thiele Mineault Grodzki (2016 ONCA 377) pp. 24-26
Hodge, supra note 7 at at para. 26.
15
Hodge, supra note 7 at para. 23.
14

14

B. Disbursements
There are several sample CFAs available on the web. A good example, incorporating more than two
dozen required clauses further to the Solicitors Act, R.S.O. 1990, c.S.15 and Contingency Fee
Agreements, O. Reg. 195/04, is contained in Appendix Nine.16
In practice, it is very difficult to ascertain what a typical CFA is in personal injury cases. Very few
actual agreements are evidenced in the reported cases; reference is usually only made to particular
disputed clauses. There are several sample CFAs available on the web. A good example is contained in
Appendix Nine. This document incorporates more than two dozen required clauses further to the
Solicitors Act, R.S.O. 1990, c.S.15 and Contingency Fee Agreements, O. Reg. 195/04.
For instance, there is no simple answer to whether CFAs require the client to pay disbursements whatever
the outcome. While many do contain such clauses, not all do. The courts have indicated that what
constitutes a fair and appropriate contingency fee may well be influenced by whether the agreement
requires the client plaintiff to recompense the lawyer for disbursements even if the case fails. Further, the
Ontario Superior Court has held that a firm may not charge interest on outstanding disbursements.
In Hodge, Ms. Hodge signed a standard form retainer agreement that included a clause stipulating that she
would be required to pay the firm 25% of any damages recovered plus anything recovered for partial
indemnity costs (the total of which would be no more than 40% of the damages award). She would also
be liable to pay for any disbursements incurred by the firm.17 This was not considered reasonable. By
contrast, in Cogan the Court found that a contingency fee of 33% was fair and reasonable because
plaintiff's counsel had assumed the risk of paying the disbursements in the event that the action was
unsuccessful. It is notable that for few of the cases identified for this study was there a breakdown of
what was to be included in disbursements.
Another important issue is what expenses can or should be included under the general rubric of
disbursements. In Henricks-Hunter, the reported disbursements were found to include a significant
number of office expenses and items such as "drinks" and "finding a Tim Hortons restaurant.18 Again,
in Hodge, an amount of 48,942.37 was charged for disbursements. The disbursements included
$4,008.27 for photocopies; $2,791.20 for laser copies; $1,280.70 for scanned documents; $1,372.33 for
interest recovery; and $200.00 for Miscellaneous Expenses/File Closing Charges. It has to be
remembered that Ms. Hodge ultimately only recovered the total sum of $41,906.41.19
Some lawyers have sought to charge interest on outstanding disbursements. The rationale is that these
amounts are paid at the end of the case, once it is settled or fully litigated. Yet the courts have held that
lawyers may not charge interest on outstanding disbursements. In Umbach, the courts took the view that
interest charges totaling $937.01 in respect of a particular expert could not be charged: As one of the
justifications for contingency fee agreements is that the lawyer often has to carry significant
disbursements for a prolonged period of time, I decided to invite submissions as to why the client should

16

See http://www.practicepro.ca/practice/financesbookletprecedents.asp
Hodge, supra note 7.
18
Henricks-Hunter (Litigation Guardian) 2012 ONSC 4564.
19
Hodge, supra note 7.
17

15

pay interest on unpaid disbursements as well as fees on a contingency basis, when part of the rationale
behind contingency fees is that the lawyer carries the disbursements.20
C. Double-Dipping
A very egregious practice is where lawyers charge a contingency fee on any settlement reached as well as
pocket any costs recovered as a result of or included in the settlement. This might best be described as
double-dipping. As per s.28.1 (8) of the Solicitors Act, the lawyers costs cannot be claimed over and
above the contingency percentage unless the court elevates the circumstances to exceptional. The courts
general attitude to the issue has been in conformity with the regulation. In Dryden v. Oatley Vigmond,
the assessment officer inferentially reduced the lawyers fees by the exact amount of costs. The action
was settled for $285,000 in respect of damages and interest, plus $42,500 for costs inclusive of sales tax,
and $47,500 for disbursements. Following the settlement, Mr. Dryden was charged $127,905.16 for legal
services. The assessment officer held that the CFA that had been established between the law firm and
Mr. Dryden was unjustified. Further, she concluded that the $128,000 legal bill that had been rendered to
Mr. Dryden was excessive and should be reduced by almost $43,000, to $85,000 including GST. On this
issue, the Hodge case is notorious for the fact that the client was required to pay to the law firm the
contingency fee plus any costs recovered or bargained for, up to 40% of the amount recovered. She
would also be liable to pay for any disbursements incurred by the firm. Although the CFA provided that
the solicitors would be paid a fee plus any costs recovered, no application was made to a judge for
approval of the agreement, as required under s. 28.1(8) of the Solicitors Act.
There are other cases on the public record where the lawyer sought to claim costs on top of a contingency
fee. In Seguin v Van Dyke,21 the plaintiff signed a CFA with her lawyer pursuant to which the lawyer
was to be paid, in the event of a settlement, 33.3% of the settlement amount (including costs) plus
disbursements. However, in the event of judgment after trial, her lawyer was to receive 33.3% of the
damages, plus 100% of the costs. The CFA was declared to be unenforceable. Also, in Choi v Choi,22
the CFA was found to be unenforceable where a lawyer sought to obtain $1M be paid to the law firm for
partial indemnity costs and disbursements inclusive of GST; and a further $1.6M as a contingency fee.
D. Percentages Charged
The data that was available for this study (see Appendix 6 for summaries of the relevant cases) is wholly
inadequate for describing the typical experience of Ontario personal injury plaintiffs with respect to the
cost of their legal representation. It does, however, illustrate that, of the CFAs that have been challenged
or reviewed before the courts in recent years, a large number have been either deemed unenforceable, in
violation of the Solicitors Act, ordered for reassessment and/or otherwise had their original terms altered
in favour of the client. It also shows that even among challenged CFAs that have ultimately received
court approval, the total amount of compensation paid to the lawyer in contingency fee, costs, and
disbursements, depicted as a percentage of the total of awarded damages, can be quite high.
The chart that follows shows the break-down of compensation paid to the plaintiff lawyer in thirteen
personal injury cases where the CFA was challenged and ultimately deemed to be enforceable. For
20

Umbach (Litigation guardian of) v. Wilmot (Township) (2014 ONSC 2995).


Seguin, supra note 9.
22
Choi v. Choi (2010 ONSC 4800).
21

16

illustrative purposes, the amounts for the class action case of Hodge v Neinstein -- where the CFA was
determined to be unenforceable -- are included in the chart.
NOTE: Red is the highest % whereas
green is the lowest
Chronological

Settlement
Amount24

Compensation paid to lawyer (% of


settled or awarded damages)23
Contingency
Fee (CF)

CF +
Costs

CF + Costs
+ Disburse

Other relevant information


Disburse (% of
settlement
amount)

Costs paid to
lawyer
$-

1. Cogan (Litigation
Guardian)

$7,362,500.00

25%

25%

26%

1%

5. Aywas (Litigation
Guardian)

$144,375.00

17%

17%

27%

9%

$14,350,000.00

7%

13%

14%

1%

$75,000.00

8%

8%

10%

2%

14. Laushway

$650,000.00

32%

32%

36%

5%

$-

17. Consky

$250,000.00

24%

24%

31%

7%

$-

$285,000.00

30%

30%

46%

17%

$-

21. Henricks-Hunter
(Litigation Guardian)

$2,050,000.00

22%

22%

24%

2%

29. Soulliere (Litigation


Guardian)

$8,500,000.00

28%

28%

31%

4%

33. Umbach (Litigation


Guardian)

$1,250,000.00

25%

25%

32%

7%

30. St. Jean

$550,000.00

29%

29%

45%

15%

81. Hodge v Neinstein


(2015)

$150,000.00

20%

40%

73%

33%

38. Batalla

$5,741,560.00

17%

17%

19%

1%

37. Edwards (Litigation


Guardian)

$2,750,000.00

8%

8%

10%

2%

9. Choi (Litigation
Guardian)
12. Dolan (Litigation
Guardian)

25

19. Dryden

23

$$863,110.00
$-

$$$$$30,000.00

This necessarily excludes agreements deemed unenforceable by the court.


Complete amount paid by the defense for tort/negligence action (i.e., excludes SAB actions). This also excludes
costs. GST was oftentimes broken out, but sometimes not.
25
This is the case where the assessment officer reduced the amount payable by the dollar value of costs.
24

17

$$-

PART C THE FAILINGS OF THE PRESENT REGIME


OF CFAs
In both theory and practice (insofar as it is possible to know), Ontarios CFA regime is open to a number
of serious objections and criticisms. The main appeal of CFAs and the basic rationale for allowing them
is that they permit claimants to pursue litigation that would otherwise remain out of reach. They are
intended as a response to the fact, and widespread perception, that the costs of legal services are
prohibitively expensive. While other ways exist to contain or respond to the high cost of legal services
(e.g., legal aid, pro bono, etc.), CFAs are one way to enable claimants to have access to the courts and
perhaps, through that, to some measure of justice. They allow claimants to seek to enforce their legal
rights with confidence that, although they might not be successful, they will not be even worse off than
they already are.26 This purpose is not be underrated or scoffed at.
At the same time, a central question is whether, in current circumstances, the benefit to plaintiffs is often
being obtained at too high a price to litigants and at too large an advantage to lawyers. While litigants
may gain from CFAs, it must not be to the greater comparative advantage of lawyers who might receive a
regular windfall in the fees received, In short, is the price of access to justice still too high? Are lawyers,
not claimants, the big winners under the present regime of CFAs?
1. Consumer Protection
The focus that I have taken to this study can be broadly understood as a consumer protection
perspective. It is now fully accepted that consumers need to be protected against the greater economic
and bargaining power of large merchants and corporations in the marketplace; there is consequently a
detailed and comprehensive set of protections and entitlements (e.g., standard terms, enhanced remedies,
etc.) in both statute and common law that serve to guard the consumer against disreputable and
exploitative practices. If there is a case for such safeguards in the general market (which there surely is),
then there is an even stronger case for protections and entitlements in regard to dealings between lawyers
and potential clients. Three particular considerations spring to mind: the enforcement of legal rights is a
mainstay of societys commitment to democracy and the Rule of Law; the stakes are extremely high for
clients, especially those with personal injuries, seeking compensation for damages caused by the
wrongdoing or negligence of others; and lawyers hold a monopoly as gatekeepers to the legal process.
Taken together, these factors mean that there should not only be appropriate and similar protections in
place for legal clients as in the general consumer context, but perhaps that the protections provided in the
legal context should be elevated.
When persons with personal injuries seek legal assistance to pursue any claims available to them, they are
doubly vulnerable. Not only is there an obvious and large imbalance in knowledge and power between
them and lawyers in regard to the validity, strength and viability of their claims, but they are also in a
debilitated and injured state. In such circumstances, it is essential that the system operates to ensure that
they are not further taken advantage of, especially by their legal advisers. Insofar as lawyers hold
themselves out as a noble profession with social duties and responsibilities, they are not simply another
26

Unsuccessful claimants will not be entirely protected because most CFAs require them to compensate lawyers
for disbursements that can be not inconsiderable.

18

business in the marketplace. Accordingly, it is incumbent on the system, both by way of legislation and
professional regulation, to take decisive steps to ensure that the interests of clients are given the fullest
protection against exploitive and unfair practices and that, conversely, lawyers are restrained from and
penalized for engaging in such practices.
As things stand now and as a result of the research done for this study, it cannot be reported that the
present scheme in regard to CFAs is operating to protect and advance the interests of clients in their
dealings with lawyers. Indeed, there is evidence that the existing scheme of regulations and rules are
allowing some lawyers to recoup larger fees than they otherwise might do under the normal hourly-fee
arrangements for services rendered. While lawyers are fully entitled to receive fair and reasonable fees
for services rendered, there is suggestive evidence that lawyers are cashing in on the opportunities for
enhancing their fees afforded by CFAs.
While the data assembled and available is limited and opaque, it appears that there are two major claims
by lawyers that need immediate and reliable confirmation:
-- that lawyers take on a significant number of cases that are unsuccessful in producing any or
sufficient compensation for the client such that the lawyer does not receive adequate fees for the
time expended on the file?; and
-- that it is possible for clients to choose to enter arrangements with personal injury lawyers that
are not based on a CFA?
Any defence of the existing system demands that both these questions can be answered in the affirmative.
Unless there is a significant number of losing cases, the argument in favour of allowing lawyers to
receive more by way of fees than they otherwise would do so becomes unpersuasive. Secondly, unless
personal injury claimants can enter other kinds of fee-arrangements with lawyers and not be simply
presented with a take-it-or-leave-it CFA (even a balanced and reasonable one), they are being exploited
by the legal process. Genuine and informed choice by consumers is a basic standard that consumers are
accorded in other commercial settings. To have less than that in the lawyering and rights-enforcement
context is simply unacceptable and against the public interest. The legal profession as much as the public
at large has a serious interest in ensuring that access to justice is real, and not simply a stated ambition.
2. Baseline Standards
A major challenge in making a sensible and reasoned assessment of Ontarios CFA system is the need to
develop a base-line level of compensation against which any changes in the billing arrangements can be
measured. One possibility recommends itself to measure what happens across files that have CF
agreements against what those files would have generated if they had been billed on a traditional hourly
basis.
Imagine that a lawyer charges an hourly rate of $200; this is about average for a Toronto personal injury
lawyer and could be said to represent what the lawyer thinks is a reasonable and achievable rate (less
substantial overheads) for their services. The precise amount will vary from lawyer to lawyer, but this is
not important for illustrative purposes. If they only worked on a traditional hourly basis, they might bill
$400,000 annually if they worked 40 hours per week for 50 weeks. Assuming that this amounts to a
reasonable level of remuneration for the hours of work done, it seems reasonable that a broadly similar

19

amount should be earned under CF arrangements, assessed as the cumulative total for both winning and
losing files.27 If lawyers were to earn substantially more than this, then they would seem to be taking
advantage of those clients who were obliged by circumstances to enter into such CF agreements. If they
were to earn substantially less than this, then they would be providing their services on a discounted rate.
To play out this logic more fully, if a lawyer were to take on files and had a 50% success rate, they would
be entitled to charge an amount that would average out to $400 per hour (or twice their normal fee of
$200) for the winning cases. This would result in them receiving their normal level of annual billing if
they were billing on an hourly basis. If their success rate were 75/25%, they would be entitled to charge
an amount that would average out to $266 per hour (or 1/3rd (25/75) over their normal fee) for the
winning cases. This would result in them receiving their normal level of annual billing of $400,000 if
they were billing on an hourly basis.
To determine the reasonableness of the fee, law firms would need to keep time dockets, and Ontario
courts occasionally do request such information of lawyers. In Young (Litigation Guardian of) v. Hinks
Estate, it was stated that it is incumbent on Mr. Acri to justify the reasonableness of the [$67k] his firm
claims in relation to the tort claim and [$76k] in relation to the accident benefits settlement I want to
see documents evidencing his retainer and dockets and understand exactly [what Mr. Acri did on the case
over 6 years]. That said, there are many instances where the court has not requested time docket
information, and have actually spoken against a reliance on time dockets, in both personal injury and class
action litigation. In Henricks-Hunter (Litigation guardian of) v. 814888 Ontario Inc, it was noted that
the determination of the proper fee in a CFA is not based on the value of the time spent, but rather on the
amount recovered for the client. Also, in West Coast Soft Wear Ltd. v. 1000128 Alberta Ltd., it was
concluded that using a percentage calculation in determining class counsel fees properly places the
emphasis on the quality of representation, and the benefits conferred to the class. A percentage-based fee
rewards one imaginative, brilliant hour rather than 1000 plodding hours.
3. Losing Cases?
As regards the reasonableness of lawyers billing under CFAs, the key factor will obviously be the ratio
of winning to losing cases that they take on. There is no reliable information, about this ratio, but it is not
as though lawyers have not made the losing cases argument before the court. However, it defies both
logic and reason to assume that experienced lawyers are taking on more than 25% of files that they
consider to be likely to lose. There is no evidence that lawyers are risking taking on files with a less than
75% chance of success. Because the effect of taking on losing cases is so dramatic (i.e., no remuneration
for work done), it would be foolhardy of lawyers to take on too many losing cases.
Moreover, it would also be wrong-headed for the legal process to proceed on the basis that lawyers took
on more losing cases than winning cases and to make rules (e.g., CFA legislation) that assumed such
miscalculation. Accordingly, any system of billing that routinely results in lawyers receiving
significantly more or less than their base-line hourly-billings amount would be unreasonable. In the
former case, litigants would be paying too much by way of legal fees and lawyers would be receiving too
27

By losing and winning cases, I do not simply mean to include only those that generate nothing and
something. By winning, I mean that litigants will receive a sizeable amount after their lawyer has been paid that
will go a substantial way to compensating them fairly for their claims.

20

much. In the latter, lawyers would be receiving less than they deserve and litigants would collectively be
paying less than they should.

PART D SOME PROPOSALS FOR REFORM OF CFAs


The reality of the functioning of CFAs and the criticism that I and others have leveled at them suggest a
number of possible reforms. While the continued use of CFAs seems to be taken as a given from an
access to justice standpoint (and for good reasons), there are several relatively small changes that could
be made that would enhance the operation and regulation of CFAs. The challenge is, as previously stated,
to make justice more accessible, but at a reasonable cost so that the interests of both litigants and lawyers
are fairly represented and balanced. The following proposals are made with this end in mind.
(1) The most pressing need is to get a better and fuller picture of how CFAs work in practice. At present,
there is far too much dark and shadow to go forward confidently with any wide-ranging reform. In light
of the aversion shown by the Plaintiffs Bar to an outside study, it is incumbent upon the Law Society of
Upper Canada (LSUC), the legal professions governing body, to commission and implement a thorough
and wide-ranging study of lawyers fees in personal injury litigation. The LSUC is the only organization
that has the prestige and authority to conduct the kind of thorough, unconditional and comprehensive
survey that is needed, and it can deal effectively with any concerns that lawyers claim to have about
privacy and confidentiality. Such a study would benefit everyone. It would confirm or contradict the
findings, criticisms, and proposals put forward in this Report, and it might well develop and validate other
insights and concerns about the whole process of fee-charging by lawyers.
(2) A particular challenge is whether leaving lawyers to fix their own percentage contingency is a fair and
defensible way to proceed. My own sense is that this has had a tendency to price access to justice at too
high a cost. While contingency fees open up litigation to more people than would otherwise be the case,
the available evidence indicates that the system has allowed some lawyers to reap financial benefits that
are out of proportion to the work done and the risk undertaken. there is not only an imbalance of power
between lawyers and clients when it comes to entering the litigation process, but clients are also in an
injured and often desperate situation. In short, clients are in need of protection. Accordingly, although
the better preference might be be to go with a fee-multiplier for successful cases rather than a straight
percentage (as this would ensure a link between the final compensation received and the actual amount of
work done), a second-best proposal would be to fix a maximum percentage that lawyers could charge.
Such maximum figure might be 25%. On the evidence available this would be a generous figure as it
generally assumes that lawyers will be taking on around 20% of cases that lose. While this seems high, it
nevertheless offers a basis on which to ensure that lawyers are adequately rewarded for their efforts.
(3) Lawyers should be mandated to keep hourly log/dockets of the time worked on any file, especially
those that are the subject of a CFA. The absence of this requirement is irresponsible and permits abuse
by unscrupulous lawyers. It is impossible to assess the fairness or reasonableness of any fee-charging
agreement between lawyers and clients without some knowledge of the time expended by the lawyer on
the file. Indeed, without such information, no court or assessment officer can realistically arrive at any
decision about the fairness or reasonableness of the fee charged. Consequently, failure to keep hourly
log/dockets of the time worked on any file should be a basis for ordering that no fees are awarded to the

21

lawyer under a CFA.


(4) In order to reduce the scope for abuse or misunderstanding, lawyers should be required to use a
standard-form CFA. At present, only New Brunswick provides and requires that a standard form be
used. If lawyers wanted to deviate from that standard form, they would need to obtain the approval of the
court. In any other situation, a deviation from the standard form would render the CFA invalid and
unenforceable. The great attractions of the standard form are that the information provided would be
consistent and put consumers in a position to compare the costs of using different law firms, while they
would also ensure fairness and protection for clients. Although there are many possible formats that such
a standard form might take, I have included a possible draft of such a standard-form CFA in Appendix
Nine.
(5) All CFAs should be registered or filed with an officer of the court. At present, this requirement has
only been mandated by New Brunswick and the North West Territories. This recommendation is not that
all CFAs are approved by an officer of the court; this would be too time-consuming and expensive.
However, the need to register or file all CFAs, along with the reliance on standard forms, will place
appropriate and increased pressure on any lawyer who might be tempted to operate through unfair or
unreasonable agreements. This requirement will introduce a level of transparency that is sorely missing
from the existing process of regulation. In particular, again when combined with a standard-form
requirement, this will provide a genuine check on the unlawful and not uncommon temptation to doubledip. Of course, truly unscrupulous lawyers might still be prepared to do side-deals with clients, but this
will hopefully be extremely rare (and a cause for severe disciple or disbarment).
* * * * *

22

APPENDIX ONE
Solicitors Act, RSO 1990, c S15
Agreements Between Solicitors and Clients
Definitions

15. In this section and in sections 16 to 33,


client includes a person who, as a principal or on behalf of another person, retains or employs or is
about to retain or employ a solicitor, and a person who is or may be liable to pay the bill of a solicitor for
any services; (client)
contingency fee agreement means an agreement referred to in section 28.1; (entente sur des honoraires
conditionnels)
services includes fees, costs, charges and disbursements. (service) R.S.O. 1990, c. S.15, s. 15; 2002,
c. 24, Sched. A, s. 1.
Agreements between solicitors and clients as to compensation

16. (1) Subject to sections 17 to 33, a solicitor may make an agreement in writing with his or her client
respecting the amount and manner of payment for the whole or a part of any past or future services in
respect of business done or to be done by the solicitor, either by a gross sum or by commission or
percentage, or by salary or otherwise, and either at the same rate or at a greater or less rate than that at
which he or she would otherwise be entitled to be remunerated. R.S.O. 1990, c. S.15, s. 16 (1).
Definition
(2) For purposes of this section and sections 20 to 32, agreement includes a contingency fee agreement.
2002, c. 24, Sched. A, s. 2.
Approval of agreement by assessment officer

17. Where the agreement is made in respect of business done or to be done in any court, except the Small
Claims Court, the amount payable under the agreement shall not be received by the solicitor until the
agreement has been examined and allowed by an assessment officer. R.S.O. 1990, c. S.15, s. 17.
Opinion of court on agreement

18. Where it appears to the assessment officer that the agreement is not fair and reasonable, he or she
may require the opinion of a court to be taken thereon. R.S.O. 1990, c. S.15, s. 18.
Rejection of agreement by court

19. The court may either reduce the amount payable under the agreement or order it to be cancelled and
the costs, fees, charges and disbursements in respect of the business done to be assessed in the same
manner as if the agreement had not been made. R.S.O. 1990, c. S.15, s. 19.

23

Agreement not to affect costs as between party and party

20. (1) Such an agreement does not affect the amount, or any right or remedy for the recovery, of any
costs recoverable from the client by any other person, or payable to the client by any other person, and
any such other person may require any costs payable or recoverable by the person to or from the client to
be assessed in the ordinary manner, unless such person has otherwise agreed. R.S.O. 1990, c. S.15,
s. 20 (1).
Idem

(2) However, the client who has entered into the agreement is not entitled to recover from any other
person under any order for the payment of any costs that are the subject of the agreement more than the
amount payable by the client to the clients own solicitor under the agreement. R.S.O. 1990, c. S.15,
s. 20 (2).
Awards of costs in contingency fee agreements

20.1 (1) In calculating the amount of costs for the purposes of making an award of costs, a court shall
not reduce the amount of costs only because the clients solicitor is being compensated in accordance with
a contingency fee agreement. 2002, c. 24, Sched. A, s. 3.
Same

(2) Despite subsection 20 (2), even if an order for the payment of costs is more than the amount payable
by the client to the clients own solicitor under a contingency fee agreement, a client may recover the full
amount under an order for the payment of costs if the client is to use the payment of costs to pay his, her
or its solicitor. 2002, c. 24, Sched. A, s. 3.
Same

(3) If the client recovers the full amount under an order for the payment of costs under subsection (2), the
client is only required to pay costs to his, her or its solicitor and not the amount payable under the
contingency fee agreement, unless the contingency fee agreement is one that has been approved by a
court under subsection 28.1 (8) and provides otherwise. 2002, c. 24, Sched. A, s. 3.
Claims for additional remuneration excluded

21. Such an agreement excludes any further claim of the solicitor beyond the terms of the agreement in
respect of services in relation to the conduct and completion of the business in respect of which it is made,
except such as are expressly excepted by the agreement. R.S.O. 1990, c. S.15, s. 21.
Agreements relieving solicitor from liability for negligence void

22. (1) A provision in any such agreement that the solicitor is not to be liable for negligence or that he
or she is to be relieved from any responsibility to which he or she would otherwise be subject as such
solicitor is wholly void. R.S.O. 1990, c. S.15, s. 22.

24

Exception, indemnification by solicitors employer

(2) Subsection (1) does not prohibit a solicitor who is employed in a master-servant relationship from
being indemnified by the employer for liabilities incurred by professional negligence in the course of the
employment. 1999, c. 12, Sched. B, s. 14.
Determination of disputes under the agreement

23. No action shall be brought upon any such agreement, but every question respecting the validity or
effect of it may be examined and determined, and it may be enforced or set aside without action on the
application of any person who is a party to the agreement or who is or is alleged to be liable to pay or who
is or claims to be entitled to be paid the costs, fees, charges or disbursements, in respect of which the
agreement is made, by the court, not being the Small Claims Court, in which the business or any part of it
was done or a judge thereof, or, if the business was not done in any court, by the Superior Court of
Justice. R.S.O. 1990, c. S.15, s. 23; 2006, c. 19, Sched. C, s. 1 (1).
Enforcement of agreement

24. Upon any such application, if it appears to the court that the agreement is in all respects fair and
reasonable between the parties, it may be enforced by the court by order in such manner and subject to
such conditions as to the costs of the application as the court thinks fit, but, if the terms of the agreement
are deemed by the court not to be fair and reasonable, the agreement may be declared void, and the court
may order it to be cancelled and may direct the costs, fees, charges and disbursements incurred or
chargeable in respect of the matters included therein to be assessed in the ordinary manner. R.S.O. 1990,
c. S.15, s. 24.
Reopening of agreement

25. Where the amount agreed under any such agreement has been paid by or on behalf of the client or by
any person chargeable with or entitled to pay it, the Superior Court of Justice may, upon the application of
the person who has paid it if it appears to the court that the special circumstances of the case require the
agreement to be reopened, reopen it and order the costs, fees, charges and disbursements to be assessed,
and may also order the whole or any part of the amount received by the solicitor to be repaid by him or
her on such terms and conditions as to the court seems just. R.S.O. 1990, c. S.15, s. 25; 2002, c. 24,
Sched. B, s. 46 (2); 2006, c. 19, Sched. C, s. 1 (1).
Agreements made by client in fiduciary capacity

26. Where any such agreement is made by the client in the capacity of guardian or of trustee under a
deed or will, or in the capacity of guardian of property that will be chargeable with the amount or any part
of the amount payable under the agreement, the agreement shall, before payment, be laid before an
assessment officer who shall examine it and may disallow any part of it or may require the direction of
the court to be made thereon. R.S.O. 1990, c. S.15, s. 26; 1992, c. 32, s. 26.
Client paying without approval to be liable to estate

27. If the client pays the whole or any part of such amount without the previous allowance of an
assessment officer or the direction of the court, the client is liable to account to the person whose estate or

25

property is charged with the amount paid or any part of it for the amount so charged, and the solicitor who
accepts such payment may be ordered by the court to refund the amount received by him or her. R.S.O.
1990, c. S.15, s. 27.
Purchase of interest prohibited

28. A solicitor shall not enter into an agreement by which the solicitor purchases all or part of a clients
interest in the action or other contentious proceeding that the solicitor is to bring or maintain on the
clients behalf. 2002, c. 24, Sched. A, s. 4.
Contingency fee agreements

28.1 (1) A solicitor may enter into a contingency fee agreement with a client in accordance with this
section. 2002, c. 24, Sched. A, s. 4.
Remuneration dependent on success

(2) A solicitor may enter into a contingency fee agreement that provides that the remuneration paid to the
solicitor for the legal services provided to or on behalf of the client is contingent, in whole or in part, on
the successful disposition or completion of the matter in respect of which services are provided. 2002,
c. 24, Sched. A, s. 4.
No contingency fees in certain matters

(3) A solicitor shall not enter into a contingency fee agreement if the solicitor is retained in respect of,
(a) a proceeding under the Criminal Code (Canada) or any other criminal or quasi-criminal
proceeding; or
(b) a family law matter. 2002, c. 24, Sched. A, s. 4.
Written agreement

(4) A contingency fee agreement shall be in writing. 2002, c. 24, Sched. A, s. 4.


Maximum amount of contingency fee

(5) If a contingency fee agreement involves a percentage of the amount or of the value of the property
recovered in an action or proceeding, the amount to be paid to the solicitor shall not be more than the
maximum percentage, if any, prescribed by regulation of the amount or of the value of the property
recovered in the action or proceeding, however the amount or property is recovered. 2002, c. 24,
Sched. A, s. 4.
Greater maximum amount where approved

(6) Despite subsection (5), a solicitor may enter into a contingency fee agreement where the amount paid
to the solicitor is more than the maximum percentage prescribed by regulation of the amount or of the
value of the property recovered in the action or proceeding, if, upon joint application of the solicitor and
his or her client whose application is to be brought within 90 days after the agreement is executed, the
agreement is approved by the Superior Court of Justice. 2002, c. 24, Sched. A, s. 4.

26

Factors to be considered in application

(7) In determining whether to grant an application under subsection (6), the court shall consider the
nature and complexity of the action or proceeding and the expense or risk involved in it and may consider
such other factors as the court considers relevant. 2002, c. 24, Sched. A, s. 4.
Agreement not to include costs except with leave

(8) A contingency fee agreement shall not include in the fee payable to the solicitor, in addition to the fee
payable under the agreement, any amount arising as a result of an award of costs or costs obtained as part
of a settlement, unless,
(a) the solicitor and client jointly apply to a judge of the Superior Court of Justice for approval to
include the costs or a proportion of the costs in the contingency fee agreement because of
exceptional circumstances; and
(b) the judge is satisfied that exceptional circumstances apply and approves the inclusion of the
costs or a proportion of them. 2002, c. 24, Sched. A, s. 4.
Enforceability of greater maximum amount of contingency fee

(9) A contingency fee agreement that is subject to approval under subsection (6) or (8) is not enforceable
unless it is so approved. 2002, c. 24, Sched. A, s. 4.
Non-application

(10) Sections 17, 18 and 19 do not apply to contingency fee agreements. 2002, c. 24, Sched. A, s. 4.
Assessment of contingency fee

(11) For purposes of assessment, if a contingency fee agreement,


(a) is not one to which subsection (6) or (8) applies, the client may apply to the Superior Court of
Justice for an assessment of the solicitors bill within 30 days after its delivery or within one year
after its payment; or
(b) is one to which subsection (6) or (8) applies, the client or the solicitor may apply to the
Superior Court of Justice for an assessment within the time prescribed by regulation made under
this section. 2002, c. 24, Sched. A, s. 4.
Regulations

(12) The Lieutenant Governor in Council may make regulations governing contingency fee agreements,
including regulations,
(a) governing the maximum percentage of the amount or of the value of the property recovered
that may be a contingency fee, including but not limited to,
(i) setting a scale for the maximum percentage that may be charged for a contingency fee
based on factors such as the value of the recovery and the amount of time spent by the
solicitor, and

27

(ii) differentiating the maximum percentage that may be charged for a contingency fee based
on factors such as the type of cause of action and the court in which the action is to be heard
and distinguishing between causes of actions of the same type;
(b) governing the maximum amount of remuneration that may be paid to a solicitor pursuant to a
contingency fee agreement;
(c) in respect of treatment of costs awarded or obtained where there is a contingency fee
agreement;
(d) prescribing standards and requirements for contingency fee agreements, including the form of
the agreements and terms that must be included in contingency fee agreements and prohibiting
terms from being included in contingency fee agreements;
(e) imposing duties on solicitors who enter into contingency fee agreements;
(f) prescribing the time in which a solicitor or client may apply for an assessment under clause
(11) (b);
(g) exempting persons, actions or proceedings or classes of persons, actions or proceedings from
this section, a regulation made under this section or any provision in a regulation. 2002, c. 24,
Sched. A, s. 4.
Where solicitor dies or becomes incapable of acting after agreement

29. Where a solicitor who has made such an agreement and who has done anything under it dies or
becomes incapable of acting before the agreement has been completely performed by him or her, an
application may be made to any court that would have jurisdiction to examine and enforce the agreement
by any person who is a party thereto, and the court may thereupon enforce or set aside the agreement so
far as it may have been acted upon as if the death or incapacity had not happened, and, if it deems the
agreement to be in all respects fair and reasonable, may order the amount in respect of the past
performance of it to be ascertained by assessment, and the assessment officer, in ascertaining such
amount, shall have regard, so far as may be, to the terms of the agreement, and payment of the amount
found to be due may be ordered in the same manner as if the agreement had been completely performed
by the solicitor. R.S.O. 1990, c. S.15, s. 29.
Changing solicitor after making agreement

30. If, after any such agreement has been made, the client changes solicitor before the conclusion of the
business to which the agreement relates, which the client is at liberty to do despite the agreement, the
solicitor, party to the agreement, shall be deemed to have become incapable to act under it within the
meaning of section 29, and upon any order being made for assessment of the amount due him or her in
respect of the past performance of the agreement the court shall direct the assessment officer to have
regard to the circumstances under which the change of solicitor took place, and upon the assessment the
solicitor shall be deemed not to be entitled to the full amount of the remuneration agreed to be paid to him
or her, unless it appears that there has been no default, negligence, improper delay or other conduct on his
or her part affording reasonable ground to the client for the change of solicitor. R.S.O. 1990, c. S.15,
s. 30.

28

Bills under agreement not to be liable to assessment

31. Except as otherwise provided in sections 16 to 30 and sections 32 and 33, a bill of a solicitor for the
amount due under any such agreement is not subject to any assessment or to any provision of law
respecting the signing and delivery of a bill of a solicitor. R.S.O. 1990, c. S.15, s. 31.
Security may be given to solicitor for costs

32. A solicitor may accept from his or her client, and a client may give to the clients solicitor, security
for the amount to become due to the solicitor for business to be transacted by him or her and for interest
thereon, but so that the interest is not to commence until the amount due is ascertained by agreement or by
assessment. R.S.O. 1990, c. S.15, s. 32.

29

APPENDIX TWO
Ontario Regulation 195/04: Contingency Fee Agreements (under the Solicitors Act)
CONTENTS

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

Signing and dating contingency fee agreement


Contents of contingency fee agreements, general
Contents of contingency fee agreements, litigious matters
Matters not to be included in contingency fee agreements
Contingency fee agreement, person under disability
Contingency fee excludes costs and disbursements
Contingency fee not to exceed damages
Settlement or judgment money to be held in trust
Disbursements and taxes
Timing of assessment of contingency fee agreement

Signing and dating contingency fee agreement

1. (1) For the purposes of section 28.1 of the Act, in addition to being in writing, a contingency fee
agreement,
a. shall be entitled Contingency Fee Retainer Agreement;
b. shall be dated; and
c. shall be signed by the client and the solicitor with each of their signatures being
verified by a witness. O. Reg. 195/04, s. 1 (1).

(2) The solicitor shall provide an executed copy of the contingency fee agreement to the client and
shall retain a copy of the agreement. O. Reg. 195/04, s. 1 (2).
Contents of contingency fee agreements, general

2. A solicitor who is a party to a contingency fee agreement shall ensure that the agreement includes the
following:
1. The name, address and telephone number of the solicitor and of the client.
2. A statement of the basic type and nature of the matter in respect of which the solicitor is
providing services to the client.
3. A statement that indicates,
i.
that the client and the solicitor have discussed options for retaining the solicitor other
than by way of a contingency fee agreement, including retaining the solicitor by way of an
hourly-rate retainer,
ii. that the client has been advised that hourly rates may vary among solicitors and that the
client can speak with other solicitors to compare rates,

30

iii. that the client has chosen to retain the solicitor by way of a contingency fee agreement,
and
iv. that the client understands that all usual protections and controls on retainers between a
solicitor and client, as defined by the Law Society of Upper Canada and the common law,
apply to the contingency fee agreement.
4. A statement that explains the contingency upon which the fee is to be paid to the solicitor.
5. A statement that sets out the method by which the fee is to be determined and, if the method of
determination is as a percentage of the amount recovered, a statement that explains that for the
purpose of calculating the fee the amount of recovery excludes any amount awarded or agreed to
that is separately specified as being in respect of costs and disbursements.
6. A simple example that shows how the contingency fee is calculated.
7. A statement that outlines how the contingency fee is calculated, if recovery is by way of a
structured settlement.
8. A statement that informs the client of their right to ask the Superior Court of Justice to review
and approve of the solicitors bill and that includes the applicable timelines for asking for the
review.
9. A statement that outlines when and how the client or the solicitor may terminate the contingency
fee agreement, the consequences of the termination for each of them and the manner in which the
solicitors fee is to be determined in the event that the agreement is terminated.
10. A statement that informs the client that the client retains the right to make all critical decisions
regarding the conduct of the matter. O. Reg. 195/04, s. 2.
Contents of contingency fee agreements, litigious matters

3. In addition to the requirements set out in section 2, a solicitor who is a party to a contingency fee
agreement made in respect of a litigious matter shall ensure that the agreement includes the following:
1. If the client is a plaintiff, a statement that the solicitor shall not recover more in fees than the
client recovers as damages or receives by way of settlement.
2. A statement in respect of disbursements and taxes, including the GST payable on the
solicitors fees, that indicates,
i.
whether the client is responsible for the payment of disbursements or taxes and, if the
client is responsible for the payment of disbursements, a general description of disbursements
likely to be incurred, other than relatively minor disbursements, and
ii. that if the client is responsible for the payment of disbursements or taxes and the solicitor
pays the disbursements or taxes during the course of the matter, the solicitor is entitled to be
reimbursed for those payments, subject to section 47 of the Legal Aid Services Act, 1998
(legal aid charge against recovery), as a first charge on any funds received as a result of a
judgment or settlement of the matter.

31

3. A statement that explains costs and the awarding of costs and that indicates,
i.
that, unless otherwise ordered by a judge, a client is entitled to receive any costs
contribution or award, on a partial indemnity scale or substantial indemnity scale, if the client
is the party entitled to costs, and
ii. that a client is responsible for paying any costs contribution or award, on a partial
indemnity scale or substantial indemnity scale, if the client is the party liable to pay costs.
4. If the client is a plaintiff, a statement that indicates that the client agrees and directs that all
funds claimed by the solicitor for legal fees, cost, taxes and disbursements shall be paid to the
solicitor in trust from any judgment or settlement money.
5. If the client is a party under disability, for the purposes of the Rules of Civil Procedure,
represented by a litigation guardian,
i.
a statement that the contingency fee agreement either must be reviewed by a judge before
the agreement is finalized or must be reviewed as part of the motion or application for approval
of a settlement or a consent judgment under rule 7.08 of the Rules of Civil Procedure,
ii. a statement that the amount of the legal fees, costs, taxes and disbursements are subject to
the approval of a judge when the judge reviews a settlement agreement or consent judgment
under rule 7.08 of the Rules of Civil Procedure, and
iii. a statement that any money payable to a person under disability under an order or
settlement shall be paid into court unless a judge orders otherwise under rule 7.09 of the Rules
of Civil Procedure. O. Reg. 195/04, s. 3.
Matters not to be included in contingency fee agreements

4. (1) A solicitor shall not include in a contingency fee agreement a provision that,
(a)
requires the solicitors consent before a claim may be abandoned, discontinued or settled
at the instructions of the client;
(b)
prevents the client from terminating the contingency fee agreement with the solicitor or
changing solicitors; or
(c)
permits the solicitor to split their fee with any other person, except as provided by the
Rules of Professional Conduct. O. Reg. 195/04, s. 4 (1).

(2) In this section,


Rules of Professional Conduct means the Rules of Professional Conduct of the Law Society of Upper
Canada. O. Reg. 195/04, s. 4 (2).
Contingency fee agreement, person under disability

5. (1) A solicitor for a person under disability represented by a litigation guardian with whom the
solicitor is entering into a contingency fee agreement shall,
(a)

apply to a judge for approval of the agreement before the agreement is finalized; or

(b)
include the agreement as part of the motion or application for approval of a settlement or
a consent judgment under rule 7.08 of the Rules of Civil Procedure. O. Reg. 195/04, s. 5 (1).
32

(2) In this section,


person under disability means a person under disability for the purposes of the Rules of Civil
Procedure. O. Reg. 195/04, s. 5 (2).
Contingency fee excludes costs and disbursements

6. A contingency fee agreement that provides that the fee is determined as a percentage of the amount
recovered shall exclude any amount awarded or agreed to that is separately specified as being in respect
of costs and disbursements. O. Reg. 195/04, s. 6.
Contingency fee not to exceed damages

7. Despite any terms in a contingency fee agreement, a solicitor for a plaintiff shall not recover more in
fees under the agreement than the plaintiff recovers as damages or receives by way of settlement. O. Reg.
195/04, s. 7.
Settlement or judgment money to be held in trust

8. A client who is a party to a contingency fee agreement shall direct that the amount of funds claimed by
the solicitor for legal fees, cost, taxes and disbursements be paid to the solicitor in trust from any
judgment or settlement money. O. Reg. 195/04, s. 8.
Disbursements and taxes

9. (1) If the client is responsible for the payment of disbursements or taxes under a contingency fee
agreement, a solicitor who has paid disbursements or taxes during the course of the matter in respect of
which services were provided shall be reimbursed for the disbursements or taxes on any funds received as
a result of a judgment or settlement of the matter. O. Reg. 195/04, s. 9 (1).

(2) Except as provided under section 47 of the Legal Aid Services Act, 1998 (legal aid charge
against recovery), the amount to be reimbursed to the solicitor under subsection (1) is a first charge on the
funds received as a result of the judgment or settlement. O. Reg. 195/04, s. 9 (2).
Timing of assessment of contingency fee agreement

10. For the purposes of clause 28.1 (11) (b) of the Act, the client or the solicitor may apply to the
Superior Court of Justice for an assessment of the solicitors bill rendered in respect of a contingency fee
agreement to which subsection 28.1 (6) or (8) of the Act applies within six months after its delivery.
O. Reg. 195/04, s. 10.

11. OMITTED (PROVIDES FOR COMING INTO FORCE OF PROVISIONS OF THIS REGULATION). O. Reg.
195/04, s. 11.

33

APPENDIX THREE
LSUC Rules of Professional Conduct
Contingency Fees and Contingency Fee Agreements
3.6-2 Subject to rule 3.6-1, except in family law or criminal or quasi-criminal matters, a lawyer may enter
into a written agreement in accordance with the Solicitors Act and the regulations thereunder, that
provides that the lawyers fee is contingent, in whole or in part, on the successful disposition or
completion of the matter for which the lawyer's services are to be provided. [Amended November 2002,
October 2004]
Commentary [1] In determining the appropriate percentage or other basis of the contingency fee, the
lawyer and the client should consider a number of factors, including the likelihood of success, the nature
and complexity of the claim, the expense and risk of pursuing it, the amount of the expected recovery and
who is to receive an award of costs. The lawyer and client may agree that in addition to the fee payable
under the written agreement, any amount arising as a result of an award of costs or costs obtained as a
part of a settlement is to be paid to the lawyer. Such agreement under the Solicitors Act must receive
judicial approval. In such circumstances, a smaller percentage of the award than would otherwise be
agreed upon for the contingency fee, after considering all relevant factors, will generally be appropriate.
The test is whether the fee in all of the circumstances is fair and reasonable.
[New - October 2002, Amended October 2004, October 2014] [2] [FLSC - not in use]
LSUC Rules of Paralegal Conduct
Contingency Fees (7) Except in quasi-criminal or criminal matters, a paralegal may enter into a written
agreement that provides that the paralegals fee is contingent, in whole or in part, on the successful
disposition or completion of the matter for which the paralegals services are to be provided. (8) In
determining the appropriate percentage or other basis of a contingency fee under subrule (7), the paralegal
shall advise the client on the factors that are being taken into account in determining the percentage or
other basis, including the likelihood of success, the nature and complexity of the claim, the expense and
risk of pursuing it, the amount of the expected recovery, who is to receive an award of costs and the
amount of costs awarded. (9) The percentage or other basis of a contingency fee agreed upon under
subrule (7) shall be fair and reasonable, taking into consideration all of the circumstances and the factors
listed in subrule (8).

34